Bisie Mine operator Alphamin Resources Corp. (AFM: TSXV, APH; JSE: AltX) has announced record annual tin production of 12,568 t, up 1% from 12,493 t in 2022, representing 4.5% of global mine production in 2023.
Tin-in-concentrate production in the fourth quarter of 2023 was 3,126 t, up 1% quarter-on-quarter from 3,104 t. This increase is largely due to the planned increased quantity of ore processed from 100,395 t in Q3 to 105,510 t (5% increase), which balanced a slight decline in the grade of ore processed from 4.08% to 3.98%. Recovery rates saw a marginal quarter-on-quarter decrease from 76% to 75%.
Sales of tin declined 11% from 12,764 t in 2022 to 11,385 t in 2023, with the realisation of transport disruptions in the fourth quarter. Sales declined 34% from 3,110 in Q3 to 2,046 in Q4. Regional heavy rainfall resulted in increased truck transit times in Q4, and Alphamin anticipates a catch-up in tin sales during Q1 2024.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) witnessed a decline of 47% to $20,321,000 in the quarter ended December 2023, while all-in sustaining costs (AISC) remained flat at $14,645 per tonne product sold in the same period. From 2022 to 2023, EBITDA decreased 39%, while AISC saw little change from $14,237 per tonne to $14,259 per tonne. Delays in sales, higher diesel prices, and with a 5% quarter-on-quarter and 15% year-on-year decline in average tin price achieved contributed to the change in EBITDA.
The company highlighted the completion of initial development at the Mpama South underground mine. The new processing plant is expected to enter production from 1 April 2024, which will bring increased annual production in 2024 to between 17,000 and 18,000 tonnes. Mpama South capital expenditure is expected to exceed the $116 million budget by 10%, which the company attributes to weather-related delays, higher logistical and import costs, and minor changes in scope.
Alphamin has also announced it has secured a four-year extension to its current off-take agreement with the Gerald Group.
Our view: Increased production in line with Alphamin’s business plans, and the nearing commencement of production at the major Mpama South development, indicate a strong return on the company’s recent capital investment. We expect 2024 to bring rapid growth in DR Congo mine production, from both Alphamin Resources and other producers.
